APG-Neuros

Everyone loves a great story about an underdog; someone who perseveres and succeeds in the face of adversity. Such is the case for Omar Hammoud, a man who founded his Blainville, Quebec company APG-Neuros from humble beginnings as a one-man operation just over a decade ago. Now with $42 million in sales, a healthy EBITDA (earnings before interest, tax, depreciation and amortization) and an employee base of about 80 people in Canada, the U.S. and the U.K., APG-Neuros has firmly established itself as a world leader in the manufacture and distribution of high-efficiency turbo blowers and compressors for the municipal and industrial markets in North America and around the world.

In addition to the head office and manufacturing facility in Blainville just northwest of Montreal is a manufacturing and testing facility in Plattsburgh, New York and an office in the United Kingdom to handle European business.

APG-Neuros holds a strong foundation both in aeronautic technology and engineering. Founded in 2006, the company distributes, manufactures and provide aftermarket support and continued development of the high efficiency Turbo Blowers and complete Aeration Systems for the municipal and industrial markets in North America and throughout the world. The air turbo blowers and high speed turbo compressors are primarily produced for secondary wastewater treatment applications such as activated sludge and membrane sequencing batch; and industrial applications.

APG-Neuros’ Turbo Blower technology was founded in the aerospace and defense industry where Aero Engines were used in Unmanned Aerial Vehicles (UAV) and in the F-16 military aviation program, making the technology tested and reliable.

The Early Years

The Canadian Business Journal recently spoke with Omar Hammoud, who serves as President and CEO of the company he founded. Prior to forming APG-Neuros, Hammoud had spent 25 years working with leaders in the aerospace and defense industries including General Electric, United Technologies and Safran, a French-based enterprise. In 2005 he decided to take his vast knowledge and apply it in the industrial market to conceptualize new ideas and benefits in an effort to cross-fertilize technology within the industry. It took about six to seven months to find a group of technology components that he was able to group together.

“At that point, engineers from South Korea also had similar backgrounds. I met them while on an assignment so we teamed up together and completed the development of an industrial product called a high-speed turbo blower,” says Hammoud.

The first unit Hammoud installed was in Quebec in 2006 and then started to develop the market in North America. “I wanted to bring the benefit of my knowledge and make a difference and be a transformer in the industry as opposed to being just a corporate employee.”

APG-Neuros had been in business for just two years with the global economic crisis took hold, which was a crushing time period for many companies and countries. For Hammoud it was an especially difficult time because he was still a one-man operation who dared to bring a new innovative product to the market that was a breakthrough disruptive technology. To say that there was apprehension would be an understatement and in fact many of the traditional companies put up roadblocks in an effort to halt his progress. In order to prove the efficiency of his product Hammoud had to come up with demonstration units in order to gain customer confidence, which required resources of both time and money.

“I had to work very hard with a very limited budget and when it came time to borrow money, that’s where it became discouraging. When I went to financial and government institutions they all expected me to be making a lot of money before they would be willing to lend me money,” laughs Hammoud.

One particular financial institution in Quebec was willing to help Hammoud, but their offer was $1 million to take over 100% of his company – an offer that was immediately declined. Instead, the budding entrepreneur took out a second mortgage on his home and used all of his own personal savings, and admits his wife became quite nervous, at one point telling him it might be better to take an executive position with an established company rather than pursuing the more costly, riskier entrepreneurial dream. But Hammoud refused to give in and his persistence paid off, but not before numerous sales trips to the United States.

“I had a breakthrough in June, 2006 when a customer had a deep need to cut power. I presented my product and it was the answer to their needs. They made a commitment to purchase but not before many of the dinosaurs in the industry tried to block this new technology with their own side deals,” recalls Hammoud.

The customer was thoroughly impressed with Hammoud’s product, which directly led to an installation in California. Advance payments provided Hammoud with the necessary bridge funding required until he received the first sales revenue. After that first installation it was a matter of repetition across the U.S. through word of mouth that largely led to where APG-Neuros is today with more than 1,100 units and about 500 projects and installations that has made the company the acknowledged market leader.

Strong Team – Strong Product

APG-Neuros has built a well-established engineering, sales and support network across North America that is dedicated to the support of the turbo blower product line. The high efficiency turbo blower is a “plug and play” product that’s ready to use at the point of delivery with a very quick and easy installation. Everything is pre-assembled and pre-integrated inside the unit in a rigid and hermetic enclosure. The APG unit has a 55% smaller footprint than conventional blowers, and can be installed outdoors under a protective shelter in the most extreme climate, both hot and cold.

“As we’ve grown we’ve also pushed all the dinosaurs out of the market. And, now that we are successful many of those same financial institutions have approached me, unsolicited, and want to give me pre-approved funding that I may want to use in the future,” chuckles Hammoud.

It’s often said that a company is only as good as its employees and Hammoud has gone to great lengths to ensure he hired the very best people with experience and vast expertise.

“Even in the sales department our employees are sales engineers because our product is very technical. Overall I would say 80% of our employees are engineering staff, including three PhD engineers that I just hired. I have sales employees across the U.S., two in the United Kingdom and one in the Middle East in the United Arab Emirates,” reveals Hammoud.

In terms of building out his business network Hammoud is a firm believer in developing strong outside sales alliances as a method of accelerating enterprise growth. That network has now grown to more than 120 people, many of whom are the best agents and distributors who want to promote what is undeniably the best product in the industry.

Some major projects where APG-Neuros has had installations or is continuing additional work includes cities such as Toronto, Vancouver, Victoria, Winnipeg, New York, Washington D.C., Chicago, Baltimore, Orlando, Las Vegas, Seattle, Cincinnati, Houston, Dallas, and London, England just to name a few – the list goes on and on. The installations are straightforward plug-and-play, but depending on the scope of the size of the project it could take anywhere from a week to a year to have the equipment ready for installation.

International Expansion

APG-Neuros began installations in the U.K. about three years ago but Hammoud says it’s been a much longer process because it’s much more structured than what you would find in North America. Another problem throughout much of Europe is that many European competitors don’t always play by the rules.

“The moment our European competitors see us trying to get into the U.K. or continental Europe they drop prices below the actual costs as a blocking strategy and there are no regulations to prevent that from happening. So, we end up having to find ways to conduct demonstrations to show how superior our product is to the others,” states Hammoud.

In speaking with Hammoud it is easy to ascertain how proud and enthusiastic he is for the work being done at his company. The passion, desire and commitment to excellence is something he demands not only from himself but everyone on the team. The company always makes the highest quality products while using the very best components. It’s a pledge by Hammoud to never use a compromised, strip-down configuration in order to sell a product that will last a long time. Those are some of the core factors as to why Hammoud is able to say his company is the best. “We are excellent at technical competency and work with the customer and their consulting engineers on the design. The responsible cities and engineering companies don’t want to take risks and shortcuts so they come to us when they want a high-efficiency, reliable project,” he says.

We also make a great effort on the customer service side. To be close to our customers we developed a smart connector product even although the customer did not require it. This allows us to see what is going on at the customer’s site by dialing in with a user ID and password. We can explain to the customers how the system can be improved and then we send them design solutions to help them improve the installation and the operation.”

“All projects are stamped by the EPA or the Minister of Environment so it makes customers responsible to properly maintain the product. We take technical leadership to enforce discipline on the customers to ensure they do the right thing. The result is better efficiency and they wind up thanking us for it. Their satisfaction leads to spreading by word of mouth that we are the market’s technical leader.”

Future Plans

Despite the tremendous success enjoyed by APG-Neuros in its first decade in business Hammoud believes there is still lots of room to grow in terms of the application of the technology and improving cost savings for clients to an even greater level. “There is also room to improve to be able to cope with the environment in which the technology works. For instance, in wastewater treatments you have contaminated sites with hydrogen sulfide and other harmful gases and what you need is a product that can operate efficiently in this environment,” he says.

APG-Neuros is also consciously driving a move in the customer space to re-use the bi-product of the treatment process, which is called biogas. It has energy contained within it so the company is promoting to produce more of it in the process and then use the bi-product as a free source of energy that will in turn reduce the operating cost for customers. That’s where Hammoud says he ended up having to develop a new product that is completely different from what the company has today, but is much better in terms of payback. “We’re about to complete the development of the product and introduce it to the market within the next two years,” he confirms.

Despite having attained incredible success during the first 10 years in business it’s evident that APG-Neuros has just begun to scratch the surface in terms of potential growth on an international scale. Hammoud is well aware of the future possibilities and plans to take full advantage of the opportunities in front of him.

“By 2020 I envision the company to be between $75 million and $100 million in sales and about 120 to 150 employees. We will have established even more strongly in the world markets in addition to maintaining our dominant leadership in Canada, the U.S. and Mexico,” he says. “I take great effort in keeping a positive culture in the company along with excellent technical competency and strong customer responsiveness from our team. We invest strongly in human resources and technology to ensure we remain the market leaders.”